ALABAMA SENATE RACE

Democrat Doug Jones defeated Roy Moore in a special election earthquake Tuesday, flipping an Alabama Senate seat to Democrats for the first time in a quarter-century and dealing a huge political setback to President Donald Trump.

The Associated Press called the race for Jones, a former U.S. attorney, who had 49.9 percent of the vote to Moore’s 48.4 percent with all precincts reporting — a difference of more than 21,000 votes.

The race underscored the ongoing intraparty war between conservative upstarts and the establishment Republicans. Moore was backed by Trump and his former chief strategist Steve Bannon, while Senate Majority Leader Mitch McConnell of Kentucky and other Senate Republicans opposed him.

The result gives Democrats their first Senate victory in the deeply conservative state since 1992. It cuts the Republican Senate majority to 51-49, which could hit the push for tax reform if the party does not pass legislation before Mr Jones takes his seat.

Years before running for Senate, Jones made a name for himself prosecuting two KKK members for the bombing of Birmingham’s 16th Street Baptist Church, a brutal crime that killed four black girls in 1963.

To be clear: This is a stunning result — no matter what preceded it. Before Tuesday, a Democrat had not won a Senate seat in Alabama in nearly three decades. The party is practically extinct in the Deep South and has been for a few years now, with its gains there gradually rolling back during the Obama presidency. Racial polarization has made the region practically impenetrable for the blue team, which basically holds majority-black congressional districts and nothing else.

Sen. Jeff Flake (R-Ariz.) responded to Democrat Doug Jones’s victory Tuesday in the Alabama Senate race by saying “Decency wins.” Flake, who has announced he will not seek reelection in 2018, was a vocal critic of Republican candidate Roy Moore.

BITCOIN $20,000

South Korea said on Wednesday it may tax capital gains from cryptocurrecy trading as global regulators worried about a bubble, with Australia’s central bank chief warning of a ‘speculative mania” that has seen the digital asset making rip-roaring gains.

Despite the attention focused on the launch of bitcoin futures in the U.S. last weekend, the center of gravity for trading the virtual currency, measured by volumes, has been in the East—starting in China, before shifting earlier this year to Japan and recently to South Korea as the latest hot spot.

Starting this week, the brokerage will allow its users to take short positions on bitcoin futures under certain conditions, according to company spokeswoman Kalen Holliday, who said the decision was made “in response to client demand.” Interactive Brokers has accepted long positions with a margin requirement of at least 50 percent since the contracts debuted Sunday on Cboe Global Markets Inc.

Interactive indicated it would move to protect itself by requiring short-sellers to deposit five times the value of their futures contracts to cover potential losses, making negative bets significantly more expensive than positive ones. There is no limit to the potential losses on short positions if prices continue to shoot higher.

And Mr Peterffy expressed his doubts about the wisdom of the positions he is allowing clients to take. “I think it’s suicidal to sell this contract, because it can run away with you. How much a bitcoin is worth, nobody knows,” he said.

Virtual currency bitcoin hit another all-time peak on Tuesday, two days after the launch of the first ever bitcoin futures on a U.S. exchange and ahead of the start of another futures contract next week, as investors grew optimistic that the $20,000-mark is within reach.

The liquidation of Mt Gox’s assets was begun years ago, when the cryptocurrency was trading at just a fraction of its current price of ¥2m ($17,600). Creditors argue that the 40-fold price surge since the exchange’s collapse means that the company’s assets now dwarf its liabilities.

The Chicago-based exchange owner said today in a message to users that it will require 47 percent to be put up at the start of a trade, known as initial margin, and 43 percent to be maintained as the contracts rise and fall in value, known as maintenance margin. The previous initial amount was set at 35 percent and the exchange hadn’t set a level of maintenance margin, according to the company.

Bitfinex, one of the world’s biggest bitcoin exchanges, said hackers are seeking to prevent users from accessing it in what are known as denial-of-service attacks. Bitfinex, which doesn’t disclose on its website or in any public documents where it’s located, ranks second in trading volume among exchanges worldwide, according to Coinhills.

Cameron and Tyler Winklevoss, thought to be among the largest holders of bitcoin, said the advent of futures is just the beginning of a phase of greater acceptance for the cryptocurrency that is often derided as a bubble.

“You can listen to all the technologists explain why these projects work or don’t work and then you go onto the trading channels and people are just talking about the price action and sometimes there’s just no correlation,” he said one morning during a recent jaunt to Australia. Like so many in the world of cryptos, he’s deeply fearful of having his virtual assets stolen by hackers and declined to give his real name. “There’s a massive bubble here that’s going to pop in an ugly way. That’s why I’m not an investor in alt-coins and ICOs, and only trade them depending on what the market’s doing.”

“While the lack of liquidity and increased volatility may keep bitcoin interesting, it’s unlikely to convince investors looking for the kind of diversification and hedging benefits which gold has proven to possess over its long history,” the analysts said.

TRUMP ATTACKS GILLIBRAND

President Trump on Tuesday attacked Sen. Kirsten Gillibrand (D-N.Y.) in a tweet widely criticized as being sexually suggestive, sparking outrage at a time when the nation is reeling from a wave of accusations about improper behavior by powerful men — including Trump himself.

“Lightweight Senator Kirsten Gillibrand, a total flunky for Chuck Schumer and someone who would come to my office ‘begging’ for campaign contributions not so long ago (and would do anything for them), is now in the ring fighting against Trump,” Mr. Trump said on Twitter. He added: “Very disloyal to Bill & Crooked-USED!”—an apparent reference to former President Bill Clinton and Hillary Clinton, Mr. Trump’s Democrat opponent in 2016.

By responding so aggressively on Tuesday, the president ensured that calls for renewed scrutiny of the women’s allegations would gain new momentum and that Democrats, who have aggressively recruited women to run for Congress, will have a volatile new issue in the midterm elections next year.

NORTH KOREA

U.S. Secretary of State Rex Tillerson offered to begin direct talks with North Korea without pre-conditions, backing away from a key U.S. demand that Pyongyang must first accept that giving up its nuclear arsenal would be part of any negotiations.

Tillerson’s new diplomatic overture comes nearly two weeks after North Korea said it had successfully tested a breakthrough intercontinental ballistic missile (ICBM) that put the entire United States mainland within range of its nuclear weapons.

“Let’s just meet,” Tillerson said in a speech to Washington’s Atlantic Council think tank on Tuesday.

The White House later issued an ambiguous statement that left unclear whether President Donald Trump – who has said Tillerson was wasting his time pursuing dialogue with North Korea – had given his approval for the speech.

Donald Trump is putting pressure on China to cut off oil exports to Pyongyang, as part of a stepped-up campaign to convince North Korean dictator Kim Jong Un to abandon his nuclear and ballistic missile programmes.

“The president would like to see China cut the oil off,” Mr Tillerson said at the Atlantic Council, a Washington-based think-tank. “The last time the North Koreans came to the table, it was because China cut the oil off. Three days later the North Koreans were at the table talking.”

Researchers in Washington and South Korea have identified a number of business transactions that they say show North Korea’s international financing web is more sophisticated than what was widely known previously.

A report by the researchers also concluded that Pyongyang’s illicit global financial network remains highly vulnerable to international sanctions, meaning the West may have broad leverage to wield. That conclusion is expected to be cited by advocates for toughening sanctions against companies doing business with North Korea.

As an example, the report cites a transaction in which a military equipment supplier run by North Korea’s intelligence agency used a front company in Hong Kong to purchase components from an East Asian electronics reseller. The payment was cleared through a correspondent account at Bank of America Corp., according to the report.

CALIFORNIA WILDFIRES

The blaze that destroyed six homes and damaged a dozen more last week in the Bel-Air neighborhood of Los Angeles — one of the country’s most affluent communities — was sparked by a cooking fire at a homeless encampment, fire officials said Tuesday.

Homeless people for several years have lived in a small canyon east of the 405 freeway near Sepulveda Boulevard in Bel-Air, said Peter Sanders, a spokesman for the Los Angeles Fire Department. Arson investigators visited the encampment the morning of Dec. 6 and found evidence that people had been cooking and sleeping in the brush area, but did not find anyone at the encampment. Much of it was destroyed by the fire.

Insurers haven’t yet estimated the scope of damage from the fires in Southern California. The Thomas Fire in Ventura County had burned 230,500 acres as of Monday morning and was 15% contained, according to estimates by the California Department of Forestry and Fire Protection, or Cal Fire. At that size, it is one of the five biggest wildfires in state history.

“My sense is most records are going to be broken” for insured catastrophe losses this year, said Cathy Seifert, equity analyst at CFRA Research. Once the Southern California fires are factored in, total insured losses from natural disasters this year could reach a record $130 billion, Wells Fargo Securities LLC said Sunday.

RUSSIA PROBE, FBI CONTROVERSY

Beleaguered Secretary of State Rex Tillerson acknowledged in a closed-door meeting with U.S. diplomats on Tuesday that Russia “interfered in democratic processes here,” something President Trump still describes as “fake news” intended to delegitimize his presidency. It’s a precarious position for Tillerson to take, even privately.

Senate Intelligence Chairman Richard Burr said he doesn’t currently see a need for more public hearings in his panel’s investigation of Russian interference in the U.S. election, but added that he still won’t be able to meet an original goal of wrapping up this year.

A lawyer for Donald Trump Jr. asked the House Intelligence Committee to open a “formal inquiry” into what he said were leaks by committee members or staff following the younger Mr. Trump’s interview with the panel earlier this month.

In a frenzy of last-minute negotiations, Republicans drew closer to agreement on nudging the corporate tax rate to 21 percent, up from the 20 percent in the bills that passed the House and Senate but still lower than the current 35 percent corporate rate, according to a lawmaker and a person briefed on the discussions.

They are also considering lowering the top individual tax rate to 37 percent, from the current top rate of 39.6 percent, to assuage concerns from some wealthy taxpayers who fear that their tax bills could rise under the current legislation, which eliminates a host of individual tax breaks.

Wealthy individuals in New York, California and other high-tax states had complained that their taxes might go up under the plan, which curtails the ability of taxpayers to deduct state and local taxes. And conservative House Republicans had said it did not go far enough to bring down top rates — long a principle of Republican economic orthodoxy.

Michael Novogratz didn’t sound amenable on a day when the Treasury Department put out a one-page report that tried to defend the economic impact of the plan. “Steve Mnuchin never even modeled the thing — idiot, I-D-I-O-T,” said Novogratz. “Gary Cohn shouldn’t be able to live with himself.”

It is unclear how Paul’s stance will affect negotiations to keep the government running beyond Dec. 22. The temporary spending bill that passed Thursday went through overwhelmingly, with 81 voting in support.

SEXUAL HARASSMENT

Even by the loose standards of the hospitality business, where rowdy drinking sessions after shifts and playful sexual banter are part of the culture, employees described Mr. Friedman’s restaurants as unusually sexualized and coercive.

It’s not the first time leaders have called for Johnson to step down. In 2016, while running for office, he posted racist photos on his Facebook page that compared President Barack Obama and first lady Michelle Obama to monkeys. He disregarded calls for him to drop out of the race — and won.

As allegations of sexual misconduct rock Capitol Hill — three lawmakers announced their resignations last week alone — Mr. Farenthold, Republican of Texas, stands out as the survivor. He was sued over accusations of sexual harassment three years ago, paid out an $84,000 settlement, financed by taxpayers, and has an open Ethics Committee investigation into his behavior. Yet only a few Republicans have called for his resignation.

A peek into the inner workings of his office reveals the kind of hostile work environment, rife with sexual innuendo, that prompted Representative Jackie Speier, Democrat of California, to call Congress “the worst” place for women to work.

“Women have been speaking up for many, many years, but were very rarely believed, and there were almost never any real consequences for offenders,” Ms Fowler told the Financial Times. “This year, that completely changed.”

Her description of the reality of working at Uber generated a crisis that has raised questions about the very viability of the company. They also formed an early part of the growing backlash against the power and influence of the Big Tech companies.

Most of all, her intervention was one of the most important testimonies in what — as the year comes to a close — has become an avalanche of allegations about sexual harassment and assault that have brought down some of the most important men in media, entertainment and business, and which hold the potential to improve the way women are treated at work permanently.

RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

For the U.S., the specter of cooler Chinese demand comes at an inopportune time, with the Federal Reserve tapering its portfolio of Treasuries and Congress debating a tax-overhaul plan that could increase the federal deficit by $1 trillion over the next decade. The U.S. debt burden was already forecast to swell by $10 trillion in that period even before any tax changes.

“It puts Treasury in a tough spot,” said Thomas Simons, a senior economist at Jefferies LLC in New York. “We have two very big domestic forces putting pressure on the market, and at the same time, our biggest global subsidy is pulling back.”

China owns almost $1.2 trillion of U.S. government debt, more than double the level from a decade ago. The bulk of the buildup came as the Chinese boosted foreign-exchange reserves to help offset a strengthening yuan.

Prior to this year, the $432,362,820,000 in total taxes (in constant 2018 dollars) that the federal government collected in the first two months of fiscal 2016 was the greatest amount of taxes the federal government had ever collected in the first two months of a fiscal year.

Senators from both parties poured cold water Tuesday on a House Republican plan that would fund the military through September while keeping the rest of the government running only into January. Congress last week passed a two-week spending bill that will keep the government funded through Dec. 22. But lawmakers have yet to figure out what their next step will be to keep it running after next Friday.

“We believe the risks of a reversal in volatility are growing, given the crowded one-sided positioning of investors in the same yield assets and short volatility strategies”. Possible triggers are higher inflation, sparked by fiscal stimulus across the US, Europe and Japan. There is also a risk that central banks decide to allow some volatility back into markets as a form of discipline for investors chasing returns, a scenario many downplay as central banks have communicated a desire to contain a bond market tantrum. But Mr Gallo also notes that we may well be entering the point in the cycle when central banks withdraw stimulus to help “build a policy buffer for a future slowdown”.

MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

In sum, the country and the GOP should breathe a sigh of relief, while Democrats are entitled to a victory lap. The party gets a final lift going into 2018, when majority control of the House and Senate is not out of the realm of possibility. A political debacle has been avoided, and we’re all the better for it.

Of course, no one remotely credible backs this up. Not the Tax Policy Center, not the Tax Foundation (which uses relatively rosy assumptions about growth), not the Penn-Wharton Budget Model, not Goldman Sachs, not the usual gang of Republican economists.

Rather than calculating the growth rate produced by the Senate tax plan, or any tax plan at all, the release merely . . . assumed a big growth rate. Then it said that if that growth rate happened to materialize, the plan would produce a whole lotta revenue. Enough to plug a big budget hole, even!

That mythical prospect—that China will become “more like us”—has held up debate in the liberal West about the larger questions posed by China’s economic and military ascendancy.

What is the appropriate response to an increasingly predatory Chinese state that takes advantage of Western openness to acquire technology even as it shelters its own markets behind protectionist barriers?

How do free societies push back against an authoritarian system that advances its geopolitical interests with clandestine influence campaigns? China co-opts the elites in target countries like Australia by offering them corporate sinecures and consultancy contracts. It buys up Chinese-language news outlets and infiltrates the Chinese diaspora through Communist Party agencies—all the while blocking Western media content at home with its Great Firewall and restricting Western influence by placing foreign NGOs under police administration.

Around the world, authoritarians, populists and other political leaders have seized on the phrase “fake news” — and the legitimacy conferred upon it by an American president — as a tool for attacking their critics and, in some cases, deliberately undermining the institutions of democracy. In countries where press freedom is restricted or under considerable threat — including Russia, China, Turkey, Libya, Poland, Hungary, Thailand, Somalia and others — political leaders have invoked “fake news” as justification for beating back media scrutiny.

More than a decade ago, China began moving gradually to rely more on natural gas and less on coal, a dirtier form of energy. This autumn, faced with public pressure to clean smoggy skies, the government decided to pick up the pace. In some places, that shift has gone awry.

The Chinese government on Tuesday shut down big chemical factories in western China for as long as four months to free up natural gas to heat homes and schools. And in Beijing, the city authorities have very publicly reversed a heavily promoted policy of ending municipal coal use. The city has turned a big coal-fired power plant in its southeastern suburbs back on — in the chilly air, it releases a towering, gray cloud of steam and pollution visible from tall buildings across much of the city.

“It is the most severe shortfall of natural gas since the commitment to build up gas demand,” said Daniel Yergin, the energy consultant and author, who is visiting Beijing this week.

The disruptions so far appear temporary. But they show how painful and expensive it will be for China to clean up its air and wean itself from dirty-burning coal. The fossil fuel helped propel the country’s economy to become the world’s second-largest, and efforts to break its coal addiction could have global, as well as national, consequences.

Amazon, then, is a machine to make a machine – it is a machine to make more Amazon. This model has two obvious consequences for Amazon. The first is that it can scale almost indefinitely – if you can launch x in y without a meeting or a new org structure, the speed of expansion into new categories is limited mostly by your ability to hire and to procure (and also by consumers’ willingness to buy a new category online, of course). The second is that the buying experience for any given product category ultimately needs to fit a lowest-common-denominator model. The platform teams cannot easily create custom experiences for each new category. You can see this sometimes as a weakness if you poke around many categories. Amazon can go almost indefinitely broad, but not necessarily deep – hence there are questions as to what categories might *need* a deeper experience – most obviously, now, higher-end clothing.

There’s a third consequence, though: those atomised teams don’t actually need to work for Amazon. This is the insight behind both AWS, which at its heart gives external teams wholesale access to the ecommerce platform, and Marketplace, which does the same for the logistics platform.

Crisis-wracked Venezuela has become fertile ground for what’s known as gold farming. People spend hours a day playing dated online games such as Tibia and RuneScape to acquire virtual gold, game points or special characters that they can sell to other players for real money or crypto-currencies such as bitcoin. The practice, which has previously cropped up in other basket-case economies such as North Korea’s, has become so popular with Venezuelans that they’re now spreading inflation inside the virtual worlds.

“We’ve never made this much before,” says Efrain Peña, 29, who plays seven days a week at the Mona Pizza cybercafe to support his wife and child. Most Venezuelan gold farmers make the equivalent of a couple of dollars a day, but in many ways they’re better off than salaried workers, because their earnings are indexed to Venezuela’s black-market dollar exchange rate. “What job can match what we’re making now?” says the onetime graphic designer.

CENTRAL BANKS & MONETARY POLICY

Web-driven comparison shopping complicates Fed decisions on how much and how fast to raise interest rates. Consumer knowledge is keeping a lid on prices that retailers can charge on a wealth of goods, a small but growing factor holding down inflation in the U.S., Japan and other advanced economies

“An electronic form of banknotes could coexist with the electronic payment systems operated by the banks, although the case for this new form of money is not yet established. If an electronic form of Australian dollar banknotes was to become a commonly used payment method, it would probably best be issued by the RBA and distributed by financial institutions, just as physical banknotes are today.”

The MPC’s biggest hawk, Kamil Zubelewicz, has already warned that his fellow central bankers are growing so nonchalant in the face of rising price pressures that rates may stay on hold through 2019. Glapinski has only said that the MPC would act if inflation neared the 3.5 percent upper end of its tolerance band, a prospect he’s described as “inconceivable.”

USA ECONOMY DATA, CITIES AND STATES

A measure of US small business optimism hit its highest level since 1983 last month, according to a National Federation of Independent Business survey released Tuesday.

The index gained 3.7 points in November, a big jump from the near-record performance seen in the previous month, NFIB data showed. In addition, eight of 10 components posted gains, including a rare 16-point increase in a reading of expected better business conditions.

“Not since the roaring Reagan economy has small business optimism been as high as it was in November,” NFIB wrote in its release.

U.S. wholesale prices rose more than forecast in November, boosted by a jump in the costs of goods that included gasoline, a Labor Department report showed Tuesday in Washington. Nonetheless, inflation at the household level remains below the Federal Reserve’s goal. Investors still expect that Fed policy makers, meeting Tuesday and Wednesday, will raise the benchmark interest rate by a quarter of a percentage point on the heels of an improving economy and a solid job market.

You name it — crude oil, gasoline, diesel, propane and even liquefied natural gas — all were shipped abroad at a record pace. While the surge comes many years after the shale boom started, it can be traced straight back to the growth of horizontal drilling and fracking. U.S. exports are poised to expand even further, as the fear of peak oil supply has all but vanished just as a new demand threat emerges in the form of electric vehicles.

GLOBAL ECONOMY DATA

As the year comes to an end, South Korea’s economy is set to expand more than 3 percent in 2017, its best performance since 2014. But because chip manufacturing is highly automated, the export boom has created relatively few jobs — about 1 percent of all new positions during the first six months of the year, according to Bank of Korea data.

“A sustained boom in the semiconductor industry leads to investment in production facilities, but with little increase in jobs,” said Hong Jun-pyo, a research fellow at Hyundai Research Institute in Seoul. “The industry’s spillover effects in supporting domestic demand and raising overall wages are weak.”

Inflation rose to 3.1% in November, the highest in nearly six years, as the squeeze on households continued. The Office for National Statistics (ONS) said that airfares and computer games contributed to the increase. The most recent data shows that average weekly wages are growing at just 2.2%.

POSITIONING, INFLECTION, MARKET CALLS

“Buy the dip” has never been so popular. “Investors no longer fear shocks but love them,” a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. “Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.’”

Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank’s analysis of price action going back to 2003. This ratio is also above the 90th percentile for the Euro Stoxx 50 Index and Nikkei 225.

CREDIT, YIELD, BUYBACKS, CORPORATES

Sears Holdings extended the terms of a $400 million loan while announcing a new planned borrowing to cover pension contributions. Sears has been closing unprofitable stores to help improve its bottom line as sales at its remaining locations continue to decline, and its footprint is likely to shrink further. The company said it would repay its new credit facility over time by selling off the underlying properties.

DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

The Walt Disney Company was poised to complete a once-unthinkable deal to swallow most of Rupert Murdoch’s movie and television empire, a $60 billion-plus acquisition that would supercharge Disney’s global streaming-service ambitions, threaten to undercut Silicon Valley’s entertainment aspirations and most likely prompt further consolidation in Hollywood.

21st Century Fox and Disney are on a “glide path” for a Thursday deal announcement, sources familiar with the deal said. Disney became the sole suitor after Comcast dropped its bid for the majority of Fox assets on Monday.

Even in its home market of France, Unibail-Rodamco isn’t a well-known corporate name. But if it consummates a deal with Westfield, it will be the world’s second-largest mall operator by market capitalization.

FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

The economic growth “we’re seeing in Europe, emerging markets and the rest of the world will likely cause the dollar to sell off again,” said Erin Browne, the head of asset allocation at UBS Asset Management, which oversees about $770 billion. When it comes to what central banks in Europe and Japan might do, “there’s very little priced in.”

There’s a favorite currency trade emerging on Wall Street: a long dollar, short Swiss franc position for 2018. Bank of America Corp., BNP Paribas SA and JPMorgan Chase & Co. are all touting a version of the strategy, based on the idea that the greenback will benefit from rising U.S. interest rates and tax cuts, while the Swiss National Bank maintains the lowest policy rate of any major central bank.

“The market is underpricing the positive impact of higher U.S. cash rates and tax legislation on the USD,” said Daniel Katzive, head of FX strategy in North America at BNP Paribas. “A continued dovish Swiss National Bank outlook combined with declining euro-zone political risk premium should be consistent with continued CHF depreciation.”

HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT

The disillusionment with stock hedge funds comes as an increasing number of institutions have grown disenchanted with the industry’s returns overall, creating the worst climate for raising money since the financial crisis. Last year, investors pulled a net $106 billion as the private partnerships trailed global stocks, according to data compiled by eVestment.

Cheap, esoteric and private investments may end up carrying the industry if recent activity is any indication: The biggest inflows this year have gone to long-biased or long-only products run by the quantitative funds, which use computers to decide what to buy and charge lower fees than most.

Brad Alford, who runs Alpha Capital Management in Atlanta, helps institutions find investment consultants, and the poor performance of hedge funds has created a boon for him. “I’m working with several large institutions who want to change their consultants because they are very unhappy that so much of their money has been directed to hedge funds,” he said. “Now they want to double down on private equity and private debt.”

Despite AQR’s early experimentations, Mr Asness remains sceptical about the hype surrounding the explosion of alternative data sources being used by investors, pointing out that any profitable signals quickly become known to the wider investment community and as a result evaporate.

“You have to fight the next war all the time,” he said. “People doing this are probably occasionally finding good signals, but in a matter of months they are competed away.”

ENERGY CRUDE OIL, OIL SANDS, SHALE

A wave of oil-supply disruptions and OPEC’s production cuts have lifted crude prices to their highest level in 30 months, and raised the prospects of petroleum producers from Saudi Arabia to Texas shale country.

Gas shortages are spreading to industrial sectors in southern and western China after authorities in Beijing diverted the fuel to the north to resolve a shortfall caused by a botched effort to cut coal use. Chemicals producers in Sichuan and Chongqing, in China’s south-west, have been ordered to shut or curtail production until March, heightening the economic impact of the disruption.

ENERGY NATURAL GAS, COAL

An explosion Tuesday at Austria’s largest import hub for natural gas left one dead, a state of emergency in Italy and the highest gas prices in 3 years in the U.K. just as the cold winter months set in.

Local police blamed the explosion at the Baumgarten an der March site on a technical defect at the gas artery some 50 kilometers (30 miles) from the capital Vienna. Despite a complete shutdown of the hub, which is critical to Italy’s supply, and a fire that scorched 2.5 acres of land, there was no immediate environmental impact detected, police spokesman Edmund Tragschitz said.

The top State Department official overseeing Europe offered harsh words Tuesday for Germany over the country’s continued support for a new Russian gas pipeline to Europe, while praising Denmark for passing a law that could hamper the project.

A shutdown of the UK North Sea’s main pipeline system for emergency repairs has helped to send the oil price above $65 a barrel for the first time in more than two years.

The Forties Pipeline System (FPS), which billionaire Jim Ratcliffe’s Ineos bought from BP just six weeks ago, delivers almost 40 per cent of UK North Sea oil and gas production. Its shutdown for several weeks, announced on Monday, will have an immediate knock-on effect on operators in the region that rely on its capacity.

COMMODITIES BASE METALS, MATERIALS

Glencore, which mines products from coal to zinc and trades some 100 raw materials, is zeroing in on cobalt after prices more than doubled this year on demand from automobile and battery manufacturers.

POLLUTION, CLIMATE & ENVIRONMENT

Global institutions pledged to cut financing of fossil-fuel projects at a summit in Paris, backing French President Emmanuel Macron’s call for the private sector to do more to combat greenhouse-gas emissions.

FRONTIER MARKETS

Pakistan’s rupee slumped to a near four-year low against the U.S. dollar, the latest move downward in an effective devaluation of the currency that had been kept steady against the greenback for much of the past two years.

Pakistan has endured a turbulent few months since the ousting of former prime minister Nawaz Sharif on charges of corruption. Since then the country’s current account deficit has continued to worsen, as exports and remittances from Pakistanis abroad drop, while imports and payments to Chinese companies as part of the $55bn China-Pakistan Economic Corridor rise.

By the end of November the central bank had $12.7bn of foreign reserves — insufficient to cover exports for three months and down from a high of $18.9bn in October last year.

BREXIT, SCOXIT, LONDON, UK ECONOMY

David Davis, Mr Barnier’s opposite number, told the BBC at the weekend that Britain was aiming at “Canada plus plus plus”, an agreement that would go much further in grafting on other sectors, notably services.

But Brussels insists that the UK faces a binary choice between participating in the single market, as Norway does, or a Canada-style deal. The focus by both sides on the Canada accord highlights a particular problem for Britain: the limited benefits for a services-based economy of a treaty that almost entirely deals with goods.

Services account for 70 per cent of British output, and, more relevantly, 40 per cent of its exports. And while there are limits to how well the EU services market functions — it lags well behind the bloc’s single market for goods — executives and economists say that British business would still feel the pain from leaving.

EU countries have toughened their stance on Brexit, making clear that talks on a future EU-UK relationship will not begin until March and insisting Britain will stay fully covered by EU rules during a transition — while losing its voice within regulatory agencies — after it leaves the bloc in 2019.

U.K. Prime Minister Theresa May is facing another painful Brexit dilemma: cave in to rebels in her Conservative Party who want the power to veto the final Brexit deal, or face a potentially damaging defeat.

Tory lawmakers are lining up to defy May’s orders on Wednesday and vote for an amendment to her flagship law that paves the way for the U.K.’s exit from the European Union in 2019. They want Parliament to be given a “meaningful vote” on whether to accept the final Brexit treaty — and are seeking to guarantee this in the text of the bill.

GEOPOLITICS, CRIME, TERRORISM

Two months after Donald Trump offloaded to Congress a decision on whether to reimpose sanctions on Iran over its nuclear programme, lawmakers are set to hand the contentious issue back to the president after missing a deadline to deal with it.

Mr Trump vowed in October to scrap a landmark nuclear agreement unless Congress and US allies intervened to address his concerns. But as congressmen failed to agree on changes to US legislation within 60 days, the president will now have to decide in January whether to recertify the accord and waive nuclear sanctions, or refuse to and risk breaking the pact.

The picture for Venezuela grows grimmer by the day, as tankers waiting to load fuel oil from Venezuela ports grow in number as the national oil company, PDVSA, struggles to deliver the amounts needed to load. That’s what traders and shipping data from Reuters have revealed in recent days.

When Putin went to a Russian air base in Syria on Monday and told Russian troops that “you are coming back home with victory,” he did not mention the private contractors. Russian troops are expected to remain in Syria for years while the contractors are likely to stay to guard lucrative oil and gas fields under a contract between the Syrian government and another Russian company allegedly linked to a businessman known as “Putin’s chef” for his close ties to the Kremlin.

The latest round of refugee processing comes as asylum seekers on Manus continue to complain of subpar conditions in detention centers where they were moved after the Australian authorities closed a camp where hundreds had been housed for years. And even as those called to the meetings expressed hope, questions emerged too, as several of the asylum seekers said that no one on the list seemed to be from Iran, Somalia or Sudan — countries that were part of President Trump’s travel ban.

While social media companies have become regular targets of the pro-Trump right, Bannon’s focus on Twitter — which has struggled to define and enforce its policies on harassment, abuse, and free speech — underscores how vital a battleground the platform is in the current culture war. And it illustrates how these companies, desperate to be seen as neutral actors, have been dragged out of that position by dogged political forces.

The United States ambassador to Britain, Woody Johnson, said on Tuesday that he believed that Mr. Trump would come to London to dedicate the new United States Embassy, which is scheduled to open in January, reviving a debate among Britons about what kind of welcome Mr. Trump might expect.

The presidential trip has been an on-off kind of affair — more off than on, it has sometimes seemed — ever since Mrs. May invited Mr. Trump on behalf of Queen Elizabeth II to pay an official visit. But its importance has been magnified by Britain’s plans to leave the European Union in 2019, forcing the country to form new trade relationships with major economic powers to offset the cost of withdrawing from the 28-nation European bloc.

U.S. ride-hailing company Lyft Inc on Tuesday launched its service in Toronto, marking the first time it has taken its battle against the much larger Uber Technologies Inc outside of the United States.

Facebook plans to book more revenue in the countries where it sells ads, becoming the latest tech company to bow to pressure from nations to simplify its tax structure and potentially pay more income tax overseas.

The move could mean the company faces higher taxes as it books revenue in countries such as France, Germany and Italy. But depending on how it accounts for its expenses in each jurisdiction, it may not pay much more tax overall. Revenue from its self-serve platform, where millions of small advertisers buy inventory, will continue to be booked in Ireland.

AUTOS, ELECTRIC, SELF-DRIVING

This is the biggest order since Tesla CEO Elon Musk unveiled the heavy-duty semi-truck in a splashy event Nov. 16 outside of Los Angeles. PepsiCo joins a growing list of companies, including Walmart, J.B. Hunt Transport Services, and Michigan-based grocery chain Meijer that have pre-ordered the semi-truck. Musk said during an unveiling of the truck that reserving a Semi costs $5,000.

The chief executive of Volkswagen said on Sunday that the German government should consider phasing out the subsidies that encourage Europeans to buy diesel cars, a startling change of position by the company largely responsible for diesel’s popularity in Europe.

“We should question the logic and purpose of diesel subsidies,” Matthias Müller, the chief executive of Volkswagen, said in an interview with the German newspaper Handelsblatt. “The money can be invested more sensibly to promote more environmentally friendly technologies.”

ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH

Google is deepening its push into China as it seeks an edge in one of technology’s most competitive fields: artificial intelligence. The Alphabet Inc. unit will announce the opening of a new Beijing research facility on Wednesday during its second annual developers conference in Shanghai, the company said. The Google AI China Center will have a small group of researchers supported by several hundred China-based engineers.

In a laboratory in Hong Kong, researchers at a textile company are looking for a special ingredient to improve the company’s production process: bacteria.

TAL, which opened its first factory in mainland China in 1994, had been buying bacteria from other labs to treat water used in washing cloth. Using bacteria instead of chemicals to digest organic compounds can cut the amount of waste sludge generated by as much as 80 percent and enables 100 percent of the water to be recycled in the plant.

During a production halt during the week-long Chinese New Year break this year, the bacteria in its system died, so TAL set up a research team that is using DNA sequencing to find a “superbacteria” that would be cheaper and more efficient, Lee said.

MISCELLANEOUS

It is early November, less than two weeks before his 38th birthday. He played his last game in 2011, and he now believes he suffers from chronic traumatic encephalopathy, the degenerative brain disorder linked to more than 100 former football players. For now, CTE can be confirmed only after death, but Johnson says his symptoms — anxiety, paranoia, the occasional self-destructive impulse — are consistent with those of past victims.

Johnson fears that, by the time he’s 50, he won’t remember his own name. If that proves to be the case, Johnson is taking steps for Jaylen to watch her Papi run, to learn who he was, to maybe understand why he was so unpredictable — even, on occasion, with her.

Injuries in the NFL aren’t necessarily up this year—it just seems that way because so many high-profile stars have gone down. And that has made the story of this NFL season more about the players on the sidelines than the ones on the field.

A team of the best injured players might be better than a team of all the players still standing. That sounds altogether preposterous until you look at the laundry list of names on injured reserve and realize that Wentz isn’t even the best injured quarterback. Or second best. Third, maybe.

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